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A Reply to Aguilar

Robert Murphy

posted on 23 April 2014

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Most Austrians are familiar with Victor Aguilar's Critique of Austrian Economics From 1930 to 1990. He has long since thrown down the gauntlet, by publicly offering to pay $1000 for the best response to his critique. Although there were unusual, non-academic circumstances to possibly explain the neglect of this boast, even so I viewed it as an embarrassment that no one had addressed Aguilar's points. Inasmuch as his critique centers on capital theory, an area in which I too as a graduate student chafed against the "stubborn" Austrian orthodoxy, I decided that I would be an appropriate person to write just such a reply.

 

My overall conclusion is that the Critique contains some valid criticisms of the Austrian capital theory canon. However, the Critique itself does not convince the reader that Austrian capital theory is fundamentally wrong. It is possible that reading Aguilar's treatise on "axiomatic economics" would make his alternative clearer, but this shorter piece doesn't offer enough samples to compel the reader to obtain the longer work.

 

Before proceeding to the gritty details, I should mention that I will not necessarily deal with all of the points concerning Skousen's work. Although Skousen has done great work on macro issues, I used his Economics on Trial when lambasting GDP figures in intro classes, many Austrians, particularly those associated with the Mises Institute, would not consider him as a representative of Austrian capital theory. Since (I take it) the purpose of this contest is to defend the (theoretical) honor of the editors of the Quarterly Journal of Austrian Economics, it is far more appropriate for me to focus on Aguilar's criticism of Hayek and (especially) Garrison and Mises.

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